- The GBP/USD developed a flag pattern after rallying since 1/7/2011. - The 1H chart shows the pair pushing back towards 1.59 or a bit lower where we will test a rising trendline (seen more clearly in the 4H chart). - The RSI has broken below 40, and suggests we are in a bit of a correction from the rally. The question is where will this correction take the pair. We have not even seen 38.2% retracement of the rally since 1/7. If we have a zig zag type correction, the market can extend it towards 1.5810 (38.2% retracement).

- The 4H chart shows a rounded top in the RSI as the price action continued higher, creating a bearish divergence. - Our bullish anticipation in the intermediate term is being tested at the moment, with a short-term correction decline. This decline can be a wave 4, a corrective wave before another bullish attempt, in the context of a developing bullish impulse wave. - Looking at the Day chart, we see the 1.61 as a possible target for the bullish outlook, at fibonacci retracement level of 78.6%. A break above that seeks to test the 1.63 from Nov. 2010.